File No. 817.51/599e.
[Untitled]
Washington, October 6, 1913.
Gentlemen: The loan contracts (embraced in the two contracts called the Collateral Trust Agreement and the Contract for the [Page 1057] purchase of the Treasury Bills) which Nicaragua has completed with the Trust Company and the bankers having been submitted to the Department of State for examination and approval, I beg to say that the terms of the loan are approved by the Department, with the following reservations:
The Department would have preferred to have had the loan made without including the 49% of the railroad stock among the securities given, but in view of the fact that the Nicaraguan Government is willing to include this stock as security, and in view of the further fact that twelve months time is allowed for the redemption of the said stock after the maturity of the loan, the Department will not interpose an objection to this particular feature of the loan.
In approving this loan the Department desires it distinctly understood by the Nicaraguan Government, by Brown Brothers and by the Trust Company that this approval does not commit the Department to any further action, but is merely advisory. Because of its friendly interest in Nicaragua, because it desires to encourage all legitimate American investments in foreign countries, and because Nicaragua is dealing with American citizens, it has, at the request of all the parties interested, expressed this approval, with the understanding that the Department will be free to act according to its judgment and with the light that it then has upon any request that may be made thereafter in connection with the carrying out of the terms of these contracts.
This Department does not wish the provision about the inspector of customs to remain in the contract.
I am [etc.]